Begin typing your search above and press return to search.
News Updates

Monthly Digest Of Tax Cases- April 2022

Mariya Paliwala
1 May 2022 12:22 PM GMT
Monthly Digest Of Tax Cases- April 2022
x

Indirect Taxes Supreme Court1.Plea In Supreme Court Challenges The Constitutional Validity Of Levy Of GST On Lease/ Rent Payments Case Title: Myrayash Hotels Pvt. Ltd. v. Union of India & Ors. The Supreme Court of India has asked the petitioner(s) to serve an advance copy to the Additional Solicitor General to seek instructions in a plea challenging constitutional validity...

Indirect Taxes

Supreme Court

1.Plea In Supreme Court Challenges The Constitutional Validity Of Levy Of GST On Lease/ Rent Payments

Case Title: Myrayash Hotels Pvt. Ltd. v. Union of India & Ors.

The Supreme Court of India has asked the petitioner(s) to serve an advance copy to the Additional Solicitor General to seek instructions in a plea challenging constitutional validity of levy of GST on lease/ rent payments.

2.Interest On Delayed Refunds Covered Under Principal Provision Of Section 56 Of CGST Act Cannot Exceed 6%:Supreme Court

Case Name: Union of India And Ors. v. M/s. Willowood Chemicals Pvt. Ltd.

Citation: 2022 LiveLaw (SC) 398

The Supreme Court, on Tuesday, held that in cases of delayed refund of integrated tax paid on export of goods governed by the principal provision of Section 56 of the Central Goods and Services Tax Act, 2017, the interest would be payable at the rate of 6% as prescribed by the statute, especially when the delay was not inordinate.

High Courts

Delhi High Court

1.Revenue Fails To Discharge Onus Of Grant Of Personal Hearing,Delhi High Court Quashes Order Rejecting Refund Application Under GST Act

Case Title: Richie Rich Exim Solutions versus Commissioner of CGST Delhi South

Citation: 2022 LiveLaw (Del) 310

The Delhi High Court has quashed the order rejecting an applicant's refund application under GST Act on the ground that the revenue authority had breached the principles of natural justice by not affording a reasonable opportunity to the applicant before rejecting its refund application.

2.Show Cause Notice Completely Deficient In Material Particulars: Delhi High Court Quashes GST Registration Cancellation Order

Case Title: Fada Trading Private Limited Versus Commissioner Goods and Service Tax

Citation: 2022 LiveLaw (Del) 328

The Delhi High Court bench of Justice Rajiv Shakdher and Justice Poonam Bamba has quashed the order cancelling the GST registration as the Show Cause Notice was completely deficient in material particulars.

Bombay High Court

1.Appeal Against CESTAT Order, On Classification Of Goods, And Determination Of Customs Duty Lies Before The Supreme Court: Bombay High Court

Case Title: The Commissioner of Customs II versus Axiom Cordages Ltd

The Bombay High Court has ruled than an appeal from an order passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), involving the question with respect to classification of goods under the Customs Act, 1962, would lie before the Supreme Court under Section 130E of the Customs Act, since it is primarily related to determination of the rate of customs duty applicable.

2.Dept. To Decide Whether Corrected Form TRAN-1 Would Be Entertained As Per Transitional Provision Under GST: Bombay High Court Allows Taxpayers To Correct Form TRAN-1

Case Title: Ambica Fertilisers Versus The Union of India

Citation: 2022 LiveLaw (Bom) 148

The Bombay High Court bench of Justice S.G. Mehare and Justice R.D. Dhanuka has allowed the taxpayers to correct Form TRAN-1. The court has directed the department to consider the issue of whether Form TRAN-1 and other forms that would be filed or corrected by the petitioner can be entertained in accordance with provisions of section 140 of the Central Goods and Services Tax Act, 2017 and Rule 117 (1) of the Central Goods and Services Tax Rules, 2017 or not.

Karnataka High Court

Municipal Corporations Can Levy Advertisement Fee/ Tax Under KMC Act, No Conflict With Levy Of GST:Karnataka High Court

Case Title: HUBBALLI DHARWAD ADVERTISERS ASSOCIATION and others v. STATE OF KARNATAKA and Others

Citation: 2022 LiveLaw (Kar) 144

The Karnataka High Court has declared that there is no conflict between the power to levy GST under GST Act and power of Municipal Corporation to levy advertisement fee or advertisement tax under Section 134 of the Karnataka Municipal Corporations Act.

Madras High Court

1.Wrong Declaration In E-Way Bill: Madras High Court Quashes Penalty Under GST As There Was No Intention Of Tax Evasion

The Madras High Court bench of Justice C. Saravanan has quashed the penalty under GST for a wrong declaration in an e-way bill as there was no intention of tax evasion.

2.Madras High Court Directs GST Dept. To Release Detained Vehicle On Payment Of 25% Of Penalty

Case Title: M/s.RKS Agencies Versus State Tax Officer-I

The Madras High Court bench of Justice R. Suresh Kumar has directed the GST department to release the detained vehicle on the payment of 25% of the penalty.

3.Post Facto Changes In GST Registration: Madras High Court Quashes Penalty Imposed For Mismatch Of Address In Invoice And RC

Case Title: Algae Labs Pvt. Ltd. Versus State Tax Officer-I

Citation: 2022 LiveLaw (Mad) 166

The penalty imposed for mismatch of address in invoice and RC was quashed by the Madras High Court bench of Justice C. Saravanan on the grounds that there was a post facto alteration in GST registration.

4.Mere Signing Of Statement  Admitting Tax Liability, Making Payments Under Stress Of Investigation Doesn't Amount To Self-Ascertainment: Madras High Court

Case Title: M/s. Shri Nandhi Dhall Mills India Private Limited Versus Senior Intelligence Officer

Citation: 2022 LiveLaw (Mad) 167

The Madras High Court bench of Justice Anita Sumanth has held that merely because an assessee has, under the stress of investigation, signed a statement admitting tax liability and having also made a few payments as per the statement, it cannot lead to self-assessment or self-ascertainment.

5.GST ITC Refund Can't Be Denied Even If Taxpayer Has Claimed Duty Drawback: Madras High Court

Case Title: Numinous Impex (I) Pvt. Ltd. Versus The Commissioner of Customs

The Madras High Court bench of Justice C. Sarvanan has held that the refund of input tax credit (ITC) cannot be denied even if the taxpayer has claimed duty drawback.

6.Pre-Deposit Payment Made ByParent Company Having Separate Service Tax Registration Amounts To Proper Compliance: Madras High Court

Case Title: M/s.St. John CFS Part Pvt. Ltd. Versus The Commissioner of Central Excise

The Madras High Court bench of Justice R. Subramanian and Justice N.Sathish Kumar has held that the pre-deposit payment made by the parent company having a separate service tax registration amounts to proper compliance.

7.Assessee To Claim Refund of Tax Collected By State Without Authority Within 3 Years From The Date of Payment: Madras High Court

Case Title: State of Tamil Nadu Versus Deputy Commissioner (CT) (FAC)

Citation: 2022 LiveLaw (Mad) 179

The Madras High Court bench of Justice R.Mahadevan and Justice Mohhammed Shaffiq has held that any tax collected without authority would certainly amount to unjust enrichment and the assessees must claim a refund of the tax collected or retained by the state within three years from the date of their payments to the department.

8.Asian Paints To Furnish A Bank Guarantee For GST Department To Release The Detained Goods: Madras High Court

Case Title: Tvl.Asian Paints Limited Versus The Assistant Commissioner (ST)

The Madras High Court bench of Justice M. Dandapani has directed the GST department to release the detained goods on furnishing of the bank guarantee by Asian Paints.

Kerala High Court

1.Cannot Waive The Statutory Mandate of Pre-Deposit Merely On The Plea Of Financial Hardships: Kerala High Court

Case Title: Santosh Kumar K. v. The Commissioner

Citation: 2022 LiveLaw (Ker) 171

The Kerala High Court bench of Justice Bechu Kurian Thomas has ruled that the high court cannot waive the statutory mandate of pre-deposit merely on the plea of financial hardships.

2.Bonafide Error In Format Of Date On E-Way Bill, Warrants Only Minor Penalty: Kerala High Court

The Kerala High Court bench of Justice Bechu Kurian Thomas has held that a minor penalty can be imposed for a bona fide mistake in the date on an e-way bill.

3.Can GST Be Imposed On Royalty Paid To Govt? Kerala High Court To Consider

Case Title: Royal Sand & Gravels Pvt Ltd. v. Union of India & Ors.

The Kerala High Court has admitted a plea that has raised significant questions of whether royalty paid to the government qualifies as tax and if GST can be imposed on such royalty.

Gujarat High Court

1.Section 44 Of GVAT Act Akin To Garnishee Order; Requires Debtor-Creditor Relationship: Gujarat High Court

Case Title: Shri Shakti Cotton Pvt. Ltd. Versus The Commercial Tax Officer

"It can be said that in interpreting a taxing statute, the equitable considerations are entirely out of place. The reasons of morality and fairness can have no application to bring a citizen who is not within the four corners of the taxing statute within its fold so as to make him liable to payment of tax," Justice JB Pardiwala of the Gujarat High Court has opined.

2.Provisional Attachment Not To Hamper Normal Business Activities: Gujarat High court Quashes Attachment Order

Case Title: Arya Metacast Pvt. Ltd. Versus State of Gujarat

The Gujarat High Court bench of Justice J.B. Pardiwala and Justice Nisha M. Thakore has held that the provisional attachment should not hamper normal business activities of the taxable person.

3.Gujarat High Court Condemns Coercive Steps Taken By Dept. For Recovery Of Dues From Wipro While Appeal Was Pending

Case Title: M/s Wipro Ltd. Versus State of Gujarat

The Gujarat High Court bench of Justice J.B. Pardiwala and Justice Nisha M. Thakore has condemned the coercive steps of the department for recovery of dues from Wipro when the appeal was pending before the first appellate authority as well as the Tribunal.

4.Gujarat High Court Directs Assistant Commissioner Of CGST To Finalise Assessment Proceedings Within 2Months On Account Of Severe Delay

Case Title: Modern Syntex (I) Limited vs Assistant Commissioner Of CGST

The Gujarat High Court has recently issued a writ directing the Assistant Commissioner of CGST and Central Excise to initiate and complete the final assessment proceedings concerning the Applicant company and further release the Bank Guarantees in favour of the Applicant within two months. The Applicant company had also showed monetary losses worth INR 96,87,616 due to the bank guarantee charges and claimed compensation for the same in its writ application.

5.If The Authorities Acknowledge The Error And Accepts Repayment Of Erroneous Refund, It Is Logical To Restore The ITC In The Electronic Tax Ledger : Gujarat High Court

Case Title: I-Tech Plast India Pvt. Ltd vs State Of Gujarat

The Gujarat High Court has directed the revenue to re-credit/restore the Input Tax Credit (ITC) to the tune of INR 1,39,49,810 in the electronic tax ledger of the writ petitioner . The Bench comprising Justice JB Pardiwala and Justice Nisha Thakore was hearing a writ petition which sought from the Respondent-authorities to re-credit the ITC of INR 139,49,810 in the electronic credit ledger along with interest.

Allahabad High Court

1.Registration Under GST ACT Cannot Be Cancelled By Merely Describing The Firm As 'Bogus': Allahabad High Court

Case Title: Apparent Marketing Private Limited versus State of U.P. and Others

The Allahabad High Court has ruled that registration under GST Act cannot be cancelled by merely describing the firm as 'bogus'.

The Single Bench of Justice Saumitra Dayal Singh held that cancellation of GST registration has serious consequences since it takes away the fundamental right of a citizen to engage in business, adding that the revenue authorities have a heavy burden to establish the existence of facts that may allow for cancellation of registration under the GST Act.

2.Survey Not Disputed By The Partner Of The Firm Who Was Present - Can't Question Later: Allahabad High Court

Case Title: M/S. Shree Ram Engineering Works Versus Commissioner Of Commercial Tax U.P. Lucknow

Citation: 2022 LiveLaw (All) 155

The Allahabad High Court bench of Justice Piyush Agrawal has ruled that once the partner of the firm was available at the time of the survey, who must have signed the survey report, he could very easily request to correct the entries or refuse to sign the survey report, if it was not recorded as per his statement.

Rajasthan High Court

1.Rajasthan High Court Refuses To Exempt Assessee From Personal Appearance Under GST

Case Title: Suresh Balkrishna Jajra Versus Union of India

Citation: 2022 LiveLaw (Raj) 136

The Rajasthan High Court consisting of Justice Manindra Mohan Shrivastava and Justice Sameer Jain has refused to exempt the assessee from personal appearance under Section 70 of the CGST Act.

2.Rajasthan High Court Directs GST Dept. To Reimburse The Pre Deposit In View Of CIRP Of Binani Cement

Case Title: M/s Ultratech Nathdwara Cement Limited Versus Assistant Commissioner

The Rajasthan High Court bench of Justice Vinod Kumar Bharwani and Justice Sandeep Mehta has directed the GST department to reimburse amounts deposited by Binani Cement as a mandatory statutory obligation to the Ultra Tech Nathdwara Cement.

3.Rajasthan High Court Restrains GST Dept. From Recovery Of GST On Royalty Paid On Account Of Excavation Of Sand For Brick

Case Title: Shree Basant Bhandar Int Udyog Versus UOI

The Rajasthan High Court bench of Justice Madan Gopal Vyas and Justice Vijay Bishnoi has restrained the GST department from recovering GST on royalty paid on account of the excavation of sand for brick.

Madhya Pradesh High Court

1.Benefit Of MEIS Scheme Can't Be Availed If Not Opted In Shipping Bill At The Time Of Export: Madhya Pradesh High Court

Case Title: Adroit Industries (India) Ltd. Vs Union of India

The Madhya Pradesh High Court bench of Justice Vivek Rusia and Justice Amarnath Kesharwani has held that the benefit of the Merchandise Exports From India Scheme (MEIS) cannot be availed if it is not opted for in the shipping bill at the time of export.

2.Clerical Mistake In Address On E-Way Bill: Madhya Pradesh High Court Imposes Minor Penalty

Case Title: Technosteel Infraprojects Pvt. Ltd Vs The State Of Madhya Pradesh

The Madhya Pradesh High Court bench of Justice Sheel Nagu and Justice Manindar Bhatti has held that a minor penalty can be imposed for a clerical mistake in the address on an e-way bill.

Telangana High Court

Outright Rejection Of Stay Application Is Not Justified, Need To Exercise The Appellate And Revisional Jurisdiction Judicially:Telangana High Court

Case Title: Access Tough Doors P. Ltd. Vs Additional Commissioner ST

The Telangana High Court has held that the appellate and revisional authorities must judiciously exercise their discretionary power to grant a stay under the Telangana VAT Act.

CESTAT

1.Service Tax Not Leviable On IPL Promotion Activities By Anil Kumble: CESTAT

Case Title: Anil Kumble Versus Commissioner of Central Excise, Customs & Service Tax, Bangalore-I Commissionerate

The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of P. Dinesha (Judicial Member) and P. Anjani Kumar (Technical Member) has held that the promotional activities undertaken by the former Indian skipper Anil Kumble shall not be treated as "business auxiliary services", so no service tax can be imposed.

2.Interest Free Security Deposits Are Not Exigible To Service Tax: CESTAT Ahmedabad

Case Title: Marwadi Shares & Finance Ltd versus C.C.E. & S.T.-Rajkot

The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has ruled that interest free refundable security deposits are not exigible to service tax since they are not collected in consideration for providing a service.

3.Unsubstantiated Show Cause Notice And Cancellation Of Licence: CESTAT Restore Customs Broker's Licence

Case Title: M/s Perfect Cargo & Logistics Versus Commissioner of Customs, New Delhi (Airport and General)

The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) headed by Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has restored the customs broker's licence as the show cause notice or the inquiry report lacked details about the non-existence of the exporter.

4.Exported Goods Cannot Be Confiscated Under Section 113 Of Customs Act: CESTAT Hyderabad

Case Title: Nosch Labs Pvt Ltd versus Commissioner of Customs, Hyderabad

The Hyderabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that Section 113 of the Customs Act only provides for confiscation of goods that are to be exported and not for goods which have already been exported.

5.Service Tax Not Payable On Liquidated Damages: CESTAT

Case Title: M/s Madhya Pradesh Poorva Kshetra Versus Commissioner of CGST & Central Excise

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of S.K. Mohanty (Judicial Member) and P.V. Subba Rao (Technical Member) has held that service tax is not payable on liquidated damages recovered on the failure to fulfil the contract.

6.Denial Of Availment Of CENVAT Credit On Performa Invoices, Despite All Information, Is Absolutely Wrong: CESTAT

Case Title: Hindustan Zinc Ltd. Versus Commissioner Appeals

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Rachna Gupta (Judicial Member) held that the denial of availment of Cenvat Credit on performa invoices was absolutely wrong.

AAR

1.'Ready to Eat' Popcorn Sold In Retail Packages Attracts 18% GST: AAR

Applicant's Name: M/s. Agro Tech Foods Limited

The Telangana Authority of Advance Ruling, consisting of members B. Raghu Kiran and S.V. Kasi Visweswara Rao, has ruled that 18% GST is payable on 'ready to eat' popcorn sold in retail packages.

2.GST Payable On Value Of Supply Which Includes Interest For Delayed Payment: AAR

Applicant's Name: M/s. Hyderabad Metropolitan Water Supply and Sewerage Board

The Telangana Authority of Advance Ruling (AAR) bench of members S.V. Kasi Visweswara Rao and B. Raghu Kiranhas ruled that the Goods and Service Tax is payable on the value of supply, which includes interest, late fee, or penalty for delayed payment.

3.GST Is Payable 'On Fair Trade Premium': Kerala AAR

Applicant's Name: Fair Trade Alliance Kerala

The Kerala Authority of Advance Ruling (AAR) bench of Sreeparvathy S.L. and Abraham Renn S. has ruled that GST is payable on fair trade premium, which forms part of the consideration and value of a taxable supply of goods.

4.Payment Of Equated Yearly Instalments And Interest On Delayed Payment Is Exigible To GST: Telangana AAR

Applicant's Name: M/s. Hyderabad Metropolitan Water Supply and Sewerage Board

The Telangana Bench of Authority for Advance Ruling, consisting of members B. Raghu Kiran and S.V. Kasi Visweswara Rao, has ruled that payment of Equated Yearly Instalments made under Annuities Model, including interest on delayed payments made to a contractor, is eligible for GST.

5.Transportation Of Parcels By GSRTC In Its Buses Attracts 18% GST: AAR

Applicant's Name: M/s. Gujarat State Road Transport Corporation

The Gujarat Authority of Advance Ruling (AAR) consisting of Atul Mehta and Arun Richard has ruled that 18% GST is payable on the transportation of parcels by the Gujarat State Road Transport Corporation (GSRTC) in its buses.

6.Services Provided For Collection And Disposal Of Bio-Medical Waste To State Government Is Exempt From Gst: West Bengal AAR

Name of the Applicant: SNG Envirosolutions Pvt Ltd

The West Bengal Bench of the Authority for Advance Ruling (AAR) has ruled that services provided for collection and disposal of bio-medical waste to the State Government is exempt from GST.

7.GST Payable On Composite Supply Of Work Contract Involving Earth Work: Maharashtra AAR

Applicant's Name: Mahalakshmi Bt Patil Honai Construction

The Maharashtra Authority of Advance Ruling (AAR), consisting of members Ranji Magoo and T.R. Ramnani, has ruled that GST is payable on the composite supply of work contracts involving earth work.

8.Liquidated Damages And Penalties Due To Breach Of Conditions Of Contract From The Contractor Are Exigible To GST: AAR

Applicant's Name: Singareni Collieries Company Limited

The Telangana Authority of Advance Ruling (AAR) consisting of members K.V. Kasi Visweswara Rao and B. Ragu Kiran has ruled that the liquidated damages and penalties received by the applicant due to breach of conditions of the contract by the contractor are exigible to tax under the CGST and SGST Acts.

9.ITC Can Be Availed on IGST Paid Both On Imports Intra & Inter-State Sales: AAR

Applicant's Name: M/s. Euroflex Transmissions (India) Private Limited

The Telangana Authority of Advance Ruling (AAR) consisting of members B. Raghu Kiran and S.V. Kasi Visweswara Rao has ruled that IGST paid on imports is eligible to be availed as an Input Tax Credit (ITC) both on intra-state and inter-state sales.

10.Apple And Malt Cola Fizzy Attracts 28%GST And 12% GST Compensation Cess: Gujarat AAR

Applicant's Name: M/s. Mohammed Hasabhai Karbalai

Citation: ADVANCE RULING NO. GUJ/GAAR/R/2022/02

The Gujarat Authority of Advance Ruling (AAR) consisting of Atul Mehta and Arun Richard has ruled that 28% GST and 12% GST Compensation Cess are payable on Apple and Malt Cola Fizzy.

11.GST ITC Admissible On Bus Hired For Transportation Of Employees Having Capacity Of More Than 13 Passengers: Gujarat AAR

Applicant's Name: M/s. Emcure Pharmaceuticals Limited

The Gujarat Authority of Advance Ruling (AAR) consisting of Atul Mehta and Arun Richard ruled that the GST ITC is admissible on buses hired for transportation of employees having a capacity of more than 13 passengers.

AAAR

1.No GST Payable On Sewage Treatment Plant: AAAR

Appellant's Name: MIS. Rashtriya Chemicals and Fertilizers Limited

The Maharashtra Appellate Authority of Advance Ruling (AAAR) consisting of members Rajeev Kumar Mital and Ashok Kumar Mehta has ruled that sewage treatment plants (STP) are exempted from the goods and service tax (GST).

2.No GST & TDS Applicable On Renting Of Immovable Property To Social Justice Department: AAAR

The Maharashtra Appellate Authority of Advance Ruling, consisting of members Asok Kumar Mehta and Rajiv Kumar Mital, has ruled that the renting of immovable property to the social justice department is exempt from GST and TDS.

Direct Taxes

Supreme Court

Income Tax Act - Loss Suffered Due To Exchange Fluctuation While Repaying Loan Can Be Regarded As Revenue Expenditure : Supreme Court

Case Title: Wipro Finance Ltd. vs Commissioner of Income Tax

Citation: 2022 LiveLaw (SC) 418

Allowing the appeal filed by Wipro Finance Ltd., the Supreme Court observed that the loss suffered owing to exchange fluctuation can be regarded as revenue expenditure and thus an allowable deduction. The bench comprising Justices allowed the appeal against High Court judgment which had reversed the above view taken by Income Tax Appellate Tribunal.

Delhi High Court

1.Income Tax Dept. To Decide On Rectification Application Filed By American Express, Grant Refund If Any: Delhi High Court

Case Title: American Express India Private Limited Versus ACIT

Citation: 2022 LiveLaw (Del) 289

The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has directed the income tax department to decide on the rectification application filed by American Express and grant a refund, if any, along with the interest.

2.Charitable Institution Can't Be Denied Income Tax Exemption For Collecting Service Charges From Its Donors To Defray Administrative Cost: Delhi High Court

Case Title: CIT (E) Versus India HIV Aids Alliance

Citation: Citation: 2022 LiveLaw (Del) 294

The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has held that charitable institutions cannot be denied income tax exemption for collecting service charges from their donors to defray administrative costs.

3.Non Specification Of Penalty Provisions In Penalty Notice And Denial Of Immunity; Delhi High Court Holds That Assessee Is Eligible For Immunity, Says Tax Payer Should Be Incentivised

Case Title: Schneider Electric South East Asia (HQ) Pte. Ltd. Versus ACIT

Citation: 2022 LiveLaw (Del) 257

The Delhi High Court has ruled that the action of income tax authorities denying the benefit of immunity from penalty under Section 270AA of Income Tax Act to the assessee on the ground that penalty was initiated under Section 270A for misreporting of income is arbitrary since the penalty notice issued by the authorities failed to specify the limb under which the penalty proceedings were initiated.

4.Disputed Tax Demand, Pre-Condition To Deposit 20 % Of The Disputed Tax For Stay Of Recovery Proceedings, Can Be Relaxed In Appropriate Cases: Delhi High Court

Case Title: Tata Teleservices Limited versus Commissioner of Income Tax, International Taxation

Citation: 2022 LiveLaw (Del) 259

The Delhi High Court has ruled that requirement of payment of twenty percent of disputed tax demand is not a pre-requisite in all cases for putting recovery of demand in abeyance during the pendency of the first appeal.

The Bench, consisting of Justices Manmohan and Dinesh Kumar Sharma, held that the order of the income tax authority disposing of assessee's application for stay against recovery of disputed tax demand without considering the issues of prima facie case, balance of convenience and irreparable injury to the assessee was a non-reasoned order.

5.Scholarship By Hamdard Foundation, Exemption Under Income Tax Act Can't Be Denied: Delhi High Court

Case Title: Commissioner of Income Tax (Exemptions) Delhi versus Hamdard National Foundation (India)

Citation: 2022 LiveLaw (Del) 302

The Delhi High Court has upheld the factual findings made by the CIT (A) and ITAT that the merit-cum scholarship/financial assistance provided by Hamdard National Foundation was not confined to students of a particular religious community, and therefore exemption under Section 11 of Income Tax Act, 1961 cannot be denied to it.

6.If Principles Of Natural Justice Are Violated, Writ Remedy Is Available Despite Statutory Appeal: Delhi High Court

Case Title: Jindal Realty Limited versus National Faceless Assessment Centre, Delhi

Citation: 2022 LiveLaw (Del) 376

The Delhi High Court has quashed an assessment order passed by the revenue department without issuing a prior show cause notice and draft assessment order to the assessee. The High Court has ruled that the assessment order was passed in violation of the principles of natural justice as well as the mandatory procedure prescribed under the "Faceless Assessment Scheme" under the Income Tax Act.

7.Delhi High Court Stays Reopening of Income Tax Assessment Keeping In View The Credentials Of BHEL

Case Title: Bharat Heavy Electricals Limited Versus PCIT

Citation: 2022 LiveLaw (Del) 378

The Delhi High Court bench of Justice Manmohan and Justice Dinesh Kumar Sharma has stayed the reopening of income tax assessments, keeping in view the credentials of Bharat Heavy Electricals Limited (BHEL).

Kerala High Court

Non Release Of Seized Documents, Based On Pendency Of The SLP In The Supreme Court By IT Department, Is Illegal: Kerala High Court

Case Title: Udaya Sounds versus Principal Commissioner of Income Tax and Others

Citation: 2022 LiveLaw (Ker) 155

The Kerala High Court has ruled that the income tax department is not authorized to retain the title deeds seized by them under Section 132 of the Income Tax Act on the ground that a Special Leave Petition filed by the Assessee against the assessment order is pending before the Supreme Court.

Bombay High Court

1.Bombay High Court Quashes Reassessment Notice Against Tata Communications Transformation Services

Case Title: Tata Communications Transformation Services Versus Assistant Commissioner of Income Tax | Writ Petition No. 1334 Of 2021

Citation: 2022 LiveLaw (Bom) 114

The Bombay High Court bench of Justice N.J. Jamadar and Justice K.R. Shriram has quashed the reassessment notice against the Tata Communications Transformation Services.

2.Why Officer Delaying Income Tax Refund Should Not Be Directed To Pay Interest From His Pocket: Bombay High Court Asks Income Tax Dept. To Explain

Case Title: Tata Projects Limited Versus Deputy Commissioner of Income Tax

The Bombay High Court bench of Justice N.R. Borkar and Justice K.R. Shriram has asked the department to explain why an officer delaying an income tax refund should not be directed to pay interest from his pocket.

3.Only PCIT Can Sanction Reassessment Notice After Expiry Of 4 Years, Not ACIT: Bombay High Court

Case Title: J M Financial and Investment Consultancy Services Private Limited Versus Assistant Commissioner of Income Tax

The Bombay High Court bench of Justice N.R. Borkar and Justice K.R. Shriram has held that after four years of expiry from the end of the relevant assessment year, only the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner (PCIT) can accord the approval to the reassessment notice and not the Additional Commissioner of Income Tax (ACIT).

Madras High Court

TPO To Mandatorily Pass Order Determining Arm's Length Pricing Within 60 Days: Madras High Court

Case Title: The Deputy Commissioner of Income Tax Versus Saint Gobain India Private Limited

Citation: 2022 LiveLaw (Mad) 162

The Madras High Court bench of Justice R.Mahadevan and Justice J.Sathya Narayan Prasad has held that the transfer pricing officer (TPO) must mandatorily pass the order determining arm's length pricing within 60 days.

Gujarat High Court

No Show Cause Notice Issued Along With Draft Assessment Order: Gujarat High Court Quashes Section 144B Order

Case Title: Symphony Limited Vs ACIT

The Gujarat High Court bench of Justice J.B. Pardiwala and Justice Nisha M. Thakore has held that the issuance of a show cause notice along with the draft assessment order is absolutely necessary before passing an order under Section 144B of the Income Tax Act.

Chhattisgarh High Court

1.Income Tax Reassessment Notice Issued After 4 Years Without Valid Reasons: Chhattisgarh High Court Quashes Notice

Case Title: Hariom Ingots and Power Pvt. Ltd. Versus The Principal Commissioner of Income Tax | WPT No. 56 of 2022

Citation: 2022 LiveLaw (Chh) 25

The Chhattisgarh High Court bench of Justice Parth Prateem Sahu has quashed the income tax reassessment notice, which was issued after 4 years without stating any valid reason.

2.Issuance Reassessment Notice Valid On Ground Disclosure Of Bogus Purchase Bills: Chhattisgarh High Court

Case Title: Jugal Kishore Paliwal Versus Joint Commissioner of Income Tax

The Chhattisgarh High Court bench of Justice Parth Prateem Sahu has held that the reassessment notice under Section 148 of the Income Tax Act is valid on the grounds of disclosure of bogus purchase bills.

ITAT

1.​​AO's Jurisdiction Doesn't Change On Mere Surrendering Section 12A Registration: ITAT Upholds Income Tax Reassessment Order Against Young Indian

Case Title: Young Indian Vs. ACIT(E)

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) consisting of Amit Shukla (Judicial Member) and Anil Chaturvedi (Accountant Member) has upheld the income tax reassessment order against Young Indian on the grounds that the jurisdiction of AO does not change on mere surrendering registration under Section 12A of the Income Tax Act.

2.Limitation For Revisionary Jurisdiction Runs From The Date Of Assessment Order And Not Reassessment, If Subject Matter Was Not Covered In Reassessment: ITAT Kolkata

Case Title: Alkem Laboratories Limited versus Principal Commissioner of Income Tax

The Kolkata Bench of ITAT, consisting of members Rajpal Yadav (Vice President) and Rajesh Kumar (Accountant Member), has ruled that the period of limitation for exercising revisionary jurisdiction under Section 263 of Income Tax Act, 1961 runs from the date of assessment order and not the reassessment order, if the revisionary jurisdiction is sought to be exercised with respect to an issue which was not the subject matter of reassessment proceedings.

3.No Liability To Deduct TDS On Payments Made By Lenskart To Facebook Ireland: ITAT Delhi

Case Title: Addl. Commissioner of Income Tax, New Delhi versus M/s Lenskart Solution (P) Ltd.

The Delhi Bench of ITAT, consisting of members N. K. Choudhry (Judicial Member) and Anil Chaturvedi (Accountant Member), has upheld the order passed by the CIT (A) deleting additions of over Rupees 67 Lakhs made to Lenskart's taxable income for non-deduction of TDS on marketing expenses paid by it to Facebook Ireland Inc.

4.Non-Disclosure Of A Foreign Asset In ITR Is Not A Valid Reason For Imposition Of Penalty If source Of Investment Is Well Explained: Mumbai ITAT

Case Title: Additional Commissioner of Income Tax Central Range 1, Mumbai Versus Leena Gandhi Tiwari

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) headed by Pramod Kumar (Vice President) and Rahul Chaudhary (J​​udicial Member) has ruled that mere non-disclosure of a foreign asset in the income tax return, by itself, is not a valid reason for a penalty under the Black Money Act, if the source of investment is well explained by the assessee.

5.Source Of Demonetized Notes Collected By Co-Operative Society Explained, ITAT Quashes Addition Made Under Section 68 Of Income Tax Act

Case Title: Sri Bhageeratha Pattina Sahakara versus ITO, Davanagere

The Bangalore Bench of ITAT has ruled that there is no rationale in the action of the Assessing Officer of making additions to assessee's income under Section 68 of the Income Tax Act on the ground that the assessee has violated RBI notifications.

6.Assessment Order Without Reasons, Not Erroneous Or Prejudicial To The Interest Of The Revenue: ITAT Quashes Revenue's Revision Order

Case Title: Reliance Payment Solutions Limited versus Principal Commissioner of Income Tax, Mumbai

The Mumbai Bench of ITAT has ruled that action of the Assessing Officer in accepting the explanation submitted by the Assessee in the course of scrutiny assessment proceedings cannot be faulted merely because the Assessing Officer did not write specific reasons for accepting the explanation.

7.Additions By AO On The Basis Of Suo-Moto Disclosure Before The Settlement Commission, Not Permissible If The Settlement Was Aborted: ITAT Mumbai

Case Title: Late Shri Sawarmal Hisaria versus Dy. CIT, Mumbai

The Mumbai Bench of ITAT, consisting of members Kuldip Singh (Judicial Member) and Prashant Maharishi(Accountant Member), has ruled that the Assessing Officer cannot make any addition to assessee's income on the basis of the suo-moto disclosure made by the assessee before the Income Tax Settlement Commission, if the settlement got aborted due to non-fulfilment of conditions by the assessee under the Income Tax Act, 1961.

8.No TDS Required To Be Deducted On Enhanced Compensation Awarded By Court Under Land Acquisition Act: Delhi ITAT

Case Title: Land Acquisition Office versus DCIT, (TDS) Gurgaon

The Delhi Bench of ITAT, consisting of members Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member), has ruled that interest received by land owners on enhanced compensation awarded to them by the Court under Section 28 of the Land Acquisition Act, 1894 is not in the nature of 'income from other sources' under the Income Tax Act, 1961, therefore, no TDS is required to be deducted with respect to it.

9.Mere Ignorance Of Law With Respect To Compulsory Audit Under Section 44AB Is Not A Reasonable Cause For Deleting Penalty: ITAT Hyderabad

Case Title: Mohd Zaheeruddin versus Income Tax Officer, Hyderabad

The Hyderabad Bench of ITAT, consisting of members S.S. Godara (Judicial Member) and A. Mohan Alankamony (Accountant Member), has ruled that mere ignorance of law with respect to the provisions of Section 44AB of the Income Tax Act for compulsory audit of accounts, cannot be said to be a reasonable cause under Section 273B for deleting the penalty imposed on the Assessee for failure to audit accounts.

10.Routine Business Support Services Are Not Taxable As Fees For Technical Services: Delhi ITAT

Case Title: Magotteaux International SA, Belgium versus Dy. C.I.T, International Taxation, New Delhi

The Delhi Bench of ITAT, consisting of members Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member), has ruled that routine business support services are not taxable as fees for technical services (FTS) since they do not make any technology or skill available to the recipient of the services.

11.Corpus Donations Received By A Trust For A Specific Purpose Are Not Taxable, Even If The Trust Is Not Registered: ITAT Mumbai

Case Title: Versova Kokni Sunni Jamat Trust versus Centralised Processing Centre Bangalore

The Mumbai Bench of ITAT, consisting of members Sandeep Singh Karhail (Judicial Member) and Gagan Goyal (Accountant Member), has ruled that the corpus donations received by a Trust for a specific purpose are not taxable, even if the Trust is not registered under Section 12 A of the Income Tax Act, since they are in the nature of a capital receipt.

12.Subscription Fee Towards Cloud Services Not Taxable As Royalty: Delhi ITAT

Case Title: M/s MOL Corporation versus DCIT (International Taxation)

The Delhi Bench of ITAT, consisting of members Anubhav Sharma (Judicial Member) and R.K. Panda (Accountant Member), has ruled that subscription fee received towards Cloud Services is not taxable as royalty.

Next Story